Case study: Creating a business value in immersive journalism

Ilona llvonen, Joel Vanhalakka, and Nina Helander

The litmus test for all new gadgets and technologies is the market: whether, or not, consumers buy and use them. A meaningful innovation is really created only along market success. In all immersive technologies the path from the early steps of the technology' to success in the market has been slow in coming. There is anticipation of a revolution in how entertainment and media content are delivered and consumed (Watson 2017), but the revolution has yet to come.

The value of immersive technology' to journalism is clear, as it provides means for creating more engaging experiences as well as the possibility' to create more engaging content. More engagement with the users or the “audience” means more business opportunities in a market that is as a whole changing in terms of value creation and business logics (Dowling 2016). However, to provide sustainable business opportunities, immersive journalism needs a critical mass of users along with an understanding of the variety of value the technology' helps create (Cook & Sirkkunen 2013; Dowling 2016;Watson 2017).The whole financing scheme of journalism is changing (Kiing 2017), and the emergence of immersive technologies can facilitate this change, or at least benefit from the changes already taking place.

The mass markets can be reached by mobile VR applications. The limited technological capabilities, however, limit the business potential of the mobile VR for immersive journalism. On the other hand, high-quality production that takes into account these limitations already has much potential, but is often still very expensive. Therefore, immersive journalism needs to find a balance between the content production costs and content quality'. One example of how to handle this balance comes from The New York Times (NYT) and theirVR application N YTVR, which mainly consists of branded content, i.e.,VR advertisements in a journalistic storytelling form.This content is paid for by NYT’s enterprise customers. However, at the same time it works as a learning platform for journalistic VR content and offers more engaging content for their subscribers.

This chapter explains the business value aspects of immersive journalism production with a case study of NYTVR. It analyzes how journalistic enterprises can create, deliver, and capture value with immersive journalism, and what novel business opportunities the technologies and their interactive nature can enable.The chapter also explores what business partners, activities, and resources exist that could be used to leverage immersive technology-related business models in journalism. The chapter concludes by suggesting business models for immersive journalism such as subscription fees for special content, customizedVirtual Reality advertising, and sponsored content/content marketing. In addition, it discusses what supporting activities journalistic enterprises should undertake to ensure successful immersive productization.

Value creation viewpoints to digitalization

A classical value creation process is a flow where the need for a product is identified, then the product is purchased, implemented, and thus utilized (Helander & Vuori 2017). In the field of media industry the customer has traditionally been quite passive in this process. The media content creators have taken care of identifying needs (deciding what the readers/viewers are likely to be interested in) and, even in the cases where the consumers themselves paid for the content, they did that by long-term subscriptions. Purchase was thus not done for individual products, but for the general collection of products the media creator offered. Although the modern media consumer also pays through subscriptions, the duration of the subscription may heavily depend on individual content on offer (such as HBO subscriptions plummeting between the second-to-last and last seasons of the streaming series Game ofThrones, despite the amount of other content available; consumers were not prepared to pay the monthly fee for over a year while waiting for the next season to start). In the case of traditional media products, the implementation phase is not really relevant; a traditional newspaper, for example, is a ready-to-use product without the need of actual implementation or installation. Usage is also a fairly short phase in the value creation process: once the paper is read, it is discarded.

Another classical way to look at value is to examine different value functions. The most often recognized value functions are the direct ones: profit, volume, and safeguard (Walter et al. 2001). It is good to note that these describe how the customer creates value for the creator. When a customer gets the product, they are willing to pay for it, so the provider makes financial profit. The provider strives to increase the volume of business both in terms of the number of customers as well as the amount of revenue from each customer. Lastly the provider aims to safeguard business with a commitment from the customer to keep on doing business with them, i.e., so that the provider will have a positive publication circulation.

New digital technologies change where the profit to content creators comes from. Advertiser-funded media content as a dominant finance logic is giving way to a subscription-based way of operation and it also builds the grounds for view-based advertising in online media (Stroud et al. 2016). One motivation for media content subscriptions (such as Spotify, and various tv-streaming sendee providers such as Ruutu+ in Finland) is to let people avoid advertisements.The user thus pays for the opportunity to not be distracted.This option is visible also in gaming, where gamers can opt to play for free and see ads, or pay for the game and avoid the ads.The flow of money is thus changing from coming from advertisers and long-time subscribers to short-time subscribers who make their buying decisions based on currently available content and additional attractions such as fan events, as well as targeted advertisement income (Kiing 2017). Wide, and fairly steady, streams of income are thus transforming into many smaller trickles, which are more difficult to predict. In value creation terms, the safeguard that value creators receive is decreasing.This is why new forms of financing, for example crowdfunding (Aitamurto 2015), have entered into the field. One challenge thus is to locate the parties that are willing to pay for the creation of the immersive content (Westlund 2015). Because the immersive technologies naturally create a loosely coupled network of technology' providers, network providers, content creators, and supporting actors, it is necessary to understand that the revenue may come from multiple sources in the complex network. There may be multiple motivations to participate in content co-creation and surprising sources of income.

The content can be co-created, which brings more actors into the picture of the network. Good immersive content requires not only journalism and storytelling skills, but technological and audiovisual skills as well. Thus the creation is most likely done in collaboration by multiple actors of different professions who have their individual motivations for entering the network. While some may strive for increasing direct profits, others may be after other kinds of benefits altogether. This is why, in addition to the direct value functions, also indirect ones should be discussed. These functions are, for example, innovation, market, access, and scout (Walter et al. 2001). These functions enable the creation of new innovations or innovative ways of operation, or creation of possible new market opportunities. An indirect value can also take the form of access to new potential customers or an opportunity to gain new information by scouting, for example, consumer behaviors. Although their worth is difficult to measure in direct monetary terms, they can be immensely valuable for business in the long term, even if immediate monetary profit is not gained. In the case of immersive journalism, since high production costs make it difficult for the content creator to gain direct profit from the content, identifying as many indirect value opportunities as possible is important.

To understand value creation in the setting of immersive journalism, one can look at value creation in fields that rely on digital technologies in general.The emergence of digital technologies is transforming business and value creation processes in many fields. Often the technology' provides, for example, cost and time savings, and transforms the way end-users experience various products (Nelson & Ryan 2017).The entry' ofimmersive technologies to journalism is certainly transforming the way consumers experience journalism content, but one key obstacle in the way of success is that it is not doing that by decreasing costs from the point of view of the journalism content creator. This is why a wider view of the value network around the technologies is needed to analyze the business value potential created by the technologies.

Digitalization also changes the way in which the end-value that the consumer receives is created. The consumer is no longer a passive end-receiver of the product (Lewis & Westlund 2015; Lee & Hsiang 2014); instead, they are an active participant (Gronroos &Voima 2013).This is especially true in the case ofimmersive technologies, where the immersion is partly caused by the fact that the consumer can be active and interact with the content, or, at least, they can make decisions of where to look and in what order to take in things. The experience of consuming the media content is thus partly created by the consumer. It also poses challenges for the way the content is created, since the content needs to be constructed from modules that are not dependent on their order of appearance.

One challenge that digitalization poses for news and other journalism products is the pace of communication. Because a bulk of the income in the journalism field comes from advertising, gaining as much visibility and as quick visibility as possible is vital for beating competition (Newman 2016). The emphasis on a fast pace of communication and the “publish first and then dig for more information” (ING 2014) mindset runs contrary to the demands of creating high-quality immersive content, which takes time.

In addition to the value process and function perspectives, we can summarize the business value of immersive technologies by dividing it into four different themes: 1) engagement and experiences, 2) eliminated complexity and improved user experience, 3) reduced costs, and 4) better communication and collaboration (Vanhalakka 2018).We can identify how these themes also apply in immersive journalism and to tools already in use, such as 360-degree videos. 360-degree videos can connect audiences from their homes to the other side of the world, providing more realistic and more engaging journalistic scenes than traditional mediums (Prat 2018). With a headset, the 360-degree view can easily be controlled by natural movements such as gestures of the hand or moving the head, therefore making experiences such as navigating in a landscape easier than on a surface display of a webpage. While the technology is still suffering from some limitations, with enough raw material 360-degree can be a very cost-efficient way to reproduce physical environments. It’s also in some contexts a better way to communicate with audiences due to its realistic nature.

Although the value of immersive technology is becoming better understood every year, the technologies have not yet made a substantial breakthrough in the field of journalism. Immersive journalistic solutions are still mostly explorative (Watson 2017). Creating high-quality content can be expensive and, while it’s possible to create immersive experiences more affordably, compromising quality for costs can often lead to bad experiences, such as simulator sickness, which can turn away users from the mobileVR (Habig2016). However, despite its challenges, major investments into the technologies by large news agencies such as The New York Times, L'SH Today Network, Die Welt, Blick, Dagens Nyheter, ARTE, The Guardian, Sky, and Euronews (Watson 2017), and the formation of the more recent journalistic consortiums such as Journalism 360 ( 2018) signal a strong belief in the technologies’ large potential to become the next journalistic medium. While these investments and consortiums do not prove that VR/AR (virtual reality/ augmented reality) will definitely become the next big thing in journalism, there are some success stories such as NYTVR that prove it is possible to both explore the technologies ofVR/AR and create profit, despite the costs of high-quality production.

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